Credit Terms and Early Payment Calculator

Two per cent off if you pay within ten days instead of thirty is thirty-seven per cent a year.

Forty-four if you take it every time.

Nobody turns down a loan at thirty-seven per cent a year, and almost everybody turns down this discount, because it is quoted as “two per cent” and two per cent sounds small. It is two per cent for twenty days, and there are eighteen and a quarter stretches of twenty days in a year. Putting the two figures on the same footing is the entire job, and it takes a page rather than a rule of thumb because the day terms move the answer as much as the discount does.

The base is ninety-eight, not a hundred. Taking the discount means handing over 98 to settle a debt of 100, so the 2 you keep was earned on the 98 you actually parted with. Dividing by 100 is how this gets worked out when people do try, and it understates the rate every time.

The only figure the answer has to beat is what your own money costs — your overdraft rate, your loan rate, or what the cash would have earned sitting still. Not whether you feel flush. If the rate here beats your borrowing cost then taking the discount is worth doing even on borrowed money, and if it does not then no amount of spare cash makes it a good idea.

It works the other way round too. If you are the one offering a discount to get paid sooner, that same rate is what you are paying for the privilege, and it is usually a great deal more than your bank would charge you for the same twenty days.

The table shows every discount level at your day terms, so you can see where the line sits rather than being told where it sits.

It does not say always take the discount. That is the advice everybody gives and it is wrong often enough to matter: below your cost of capital the discount is a bad trade, and the page will tell you so.

And it cannot see whether the cash is actually there. A rate that beats your borrowing cost is no use if the facility is drawn and the money is not available, and this page has no view on that. Nor does it know whether the terms are negotiable, which they frequently are and which no arithmetic here can tell you.

Save as many versions as you like and put any two side by side, figure against figure, with the better one on each line marked and the difference in its own column. That screen is the one that decides things, and it is the part a free calculator cannot do at all. Terms differ between suppliers, and the same two per cent is a different rate over ten days than over forty.

One HTML file. No account, no subscription, no internet needed. Opens on Windows, Mac and Android; the readme explains the extra step on iPhone and iPad, where Apple blocks JavaScript in downloaded files and every tool of this kind is affected.

Everything lives in your browser on your device. Nothing is uploaded, which is why it works offline and why nobody else can see your figures — and it also means clearing your browsing data deletes it. The tool does not pretend otherwise: the header shows how long since your last export at all times, turns amber after three days and red after seven, and export is one click that produces a plain file you keep.